Native Americans

The price of intercourse

THE beneficiaries of the Ponzi scheme that is at the centre of Brett Fromson's book, “Hitting the Jackpot”, were a small group of people who, with little historical evidence, managed to claim the mantle of an obscure Indian tribe and then through clever legal manoeuvres, gain the right to a gambling monopoly in New England. Only in America, you might well think.

The story begins with the defeat of the Pequot tribe at the hands of settlers in the 1600s. Over the years, both the tribe and the beautiful 2,000-acre reservation they were given in eastern Connecticut steadily contracted, so that by the time Eliza Plouffe, the last resident died in 1973, only 200 acres of land remained.

After failing to run a snack bar successfully or become a preacher, Plouffe's grandson, the one-sixteenth Pequot Skip Hayward, decided to reclaim his Indian heritage. America in the 1980s was becoming increasingly eager to right past wrongs, so Mr Hayward's well-timed efforts hit the jackpot. A group of federally funded anti-poverty lawyers turned up the “non-intercourse act”, an old law signed by none other than George Washington himself that prohibited the sale of any land by Indians without explicit federal approval, and began looking to apply it.

The contraction of the Pequot reservation, which largely occurred in the mid-1800s, was deemed to have occurred without federal endorsement. In short order, these attorneys found a client in Mr Hayward, who, along with his “tribe”, a list he put together of relatives, found themselves with a claim not only on the property used by his grandmother but neighbouring properties too.

With this as a lever, Mr Hayward and his lawyers convinced the federal government to buy out the surrounding property owners, authorise the Pequots as a genuine tribe and provide them with lots of aid money as well. Opponents of the scheme included the Department of the Interior and the Reagan administration, but anyone who challenged Mr Hayward's claim to a tribe was quickly excoriated by other politicians for being insensitive or uninformed.

Within a decade, Mr Hayward and his legal team—who by now had become his financial advisers—found enough gaps in state, federal and Indian law, and enough co-operative government officials, to permit the Pequots the unique right to offer casino gambling in New England. By 1993 the Pequots owned the largest casino in the world, with annual revenues soon exceeding $1 billion.

Even this, though, was not enough. The tribe's talents did not, unfortunately, extend to areas in which they did not have an advantage in law. Their conventional businesses, which included a gravel pit, a pizza restaurant and a lettuce farm, were all disasters. About $250m was spent building a museum.

Anyone with the flimsiest claim to Pequot ancestry was included to swell the tribal numbers. The resulting Pequot population quickly grew to more than 600 people who were united by nothing more than the lure of casino profits. Unsurprisingly, social problems abounded. Some turned to violence and petty crime. Meanwhile, in the late 1990s another tribe with a slightly better location were also awarded a gambling licence, thus undermining the Pequots' monopoly. Mr Fromson says his book is about the richest tribe in American history, but as he shows, there are some things that money just can't buy—even for the rich.